Impact of expected cost reduction and lifetime extension of electrolysis stacks on hydrogen production costs

Abstract

The production of green hydrogen-based chemicals using renewable energy is essential for the decarbonization of several sectors that are difficult to address through electrification. Various electrolysis technologies are often considered for sustainable green hydrogen production. They are therefore in a phase of dynamic development. Currently, hydrogen production costs are calculated on the basis of investment costs and lifetimes of the most recent components and future production costs are calculated using development targets. The impact of ongoing developments during the project lifetime is neglected. However, these ongoing developments will have an impact on the estimation of the levelized cost of hydrogen, which is expected to be non-neglectable. This paper proposes a novel methodology that incorporates the impact of evolving electrolysis technologies on the levelized cost of hydrogen. By integrating cost and lifetime development functions, the presented approach allows for precise hydrogen cost estimations tailored to individual stack replacements, adapting to varying annual operating times. Moreover, project-specific investment costs can be derived for a more accurate calculation of the hydrogen production costs. With this method, an average capital cost reduction of more than 11% is achieved for all investigated technologies compared to a cost estimation neglecting ongoing technology developments. The methodology presented provides a comprehensive understanding of ongoing technology developments that affect the economics of hydrogen production.